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Home loan paid but bank lost original property papers? Steps to take
If a bank says it cannot find the original property documents after a home loan is repaid, borrowers should not treat it as a minor administrative issue. The original title deeds are…
If a bank says it cannot find the original property documents after a home loan is repaid, borrowers should not treat it as a minor administrative issue. The original title deeds are essential for selling, transferring, or taking another loan against the property. Experts advise immediate written action.
According to BASIC Home Loan founder Atul Monga, the first step is a written complaint to the bank's branch and customer service team, detailing the loan account number, closure date, and documents deposited. Borrowers should also demand a full inventory of original documents submitted and compare it with what was returned.
Under RBI rules, regulated entities must release original movable and immovable property documents within 30 days of full loan payment or settlement, and remove any registered charge. If delay is due to the bank, a compensation of Rs 5,000 per day applies. If documents are lost or damaged, the bank must obtain duplicate or certified copies within an additional 30 days and bear all costs. Borrowers should escalate to the bank's formal complaint mechanism if the branch does not resolve the issue.
Indian Opinion Analysis
The RBI's 2023 circular on the release of original property documents codified what was already expected of banks. Before that, borrowers had little recourse beyond the bank's own grievance system. The Rs 5,000 per day penalty is meant to create a real financial incentive for compliance, not just a symbolic deadline. What makes this case tricky is that the bank's liability under the circular is clear for delay, but recovering lost documents can stretch months or years if the original deeds were never digitised. The practical test will be how quickly the borrower gets a certified copy from the sub-registrar's office, and whether the bank actually pays the penalty without being pushed to the RBI Ombudsman.
Source: bazaar.businesstoday.in
This brief was synthesised by AI from the source linked above.
